The aim of this blog is to make readers aware of the importance of managing cash flows and investments for survival in this complex and dynamic world. Every fortnight, CashPundit Inc. publishes interviews of, or blogs written by, CEOs, CFOs, Bankers, and Finance Professionals who share their experiences and words of wisdom with our readers.

Monday, November 13, 2017

All businesspersons want to survive and expand their
businesses. All of them are passionate, are energetic, are committed, work hard,
sacrifice their family and social life, and undergo lot of difficulties. Even then,
why is it that few businesspersons barely manage to survive or even close down their
businesses, while others succeed? What
is it that these successful businesspersons do which others don’t? Is there a tried and tested formula for succeeding
in business?

Let me tell you there is no formula that guarantees 100% success
in business. Business environment is extremely complex and dynamic, and business
success depends not only on internal factors but also on external factors on
which businesspersons have little or no control. However, it is observed that, businesspersons
who are successful make it a point to monitor SRI, ie Sales, Receivables, and Inventory on a daily basis.

Sales.

Sales is the life blood of all businesses. Monitoring sales regularly is very critical
for business survival and growth. Best way of monitoring sales is to compare the
actual sales achieved versus the budgeted sales. It is very important to have a sales budget for
each region, state, city, and sales person. I am not going into how to prepare
sales budget because it is a big topic by itself. However, in short, your sales
budget should generally be based on historical data, market potential and
market share you want to capture, new products added to the portfolio, and new
territories ventured into. It is very important to monitor actual sales
achieved versus the budgeted sales, by each region, state, city and sales
person on a monthly basis. In case there
is huge variance between the actual sales and the budgeted sales, corrective
action should be taken immediately to rectify the situation.

Receivables

You need to collect the money as soon as possible after you
sell. If you are selling on cash, you don’t have to worry about receivables.
However, like most of the businesses, if you are selling on credit, it is very
important that you collect the money on or before the invoice due date. Very
few customers pay their debts within the credit period even if you do not
follow-up. Generally customers try to delay their payment, as much as possible,
even if they are in a position to pay. As
mentioned in one of my earlier posts, “a sale is a gift until you collect the
money”. So every effort must be made to
collect the money as soon as possible. Every business should have a credit
department who should be responsible for collecting the debts of the company
and keeping the organization liquid.

Many businesses who have huge receivables borrow money to
fund their operations, and incur interest costs. In a way, there are financing
the operations of their customers by borrowing funds. So it becomes very critical for business owners
to monitor their receivables on a regular basis and ensure that the overdue
receivables do not cross a certain level. Ageing of overdue receivables is very critical
and owners must closely monitor receivables which are more than 30 days
overdue, and ensure that no receivable is more than 60 days overdue. If any
receivable is more than 90 days overdue, they should consider initiating legal action
to recover the amount.

Inventory

Inventory
is another area which needs to be monitored very closely. Businesspersons must realize that their cash
is stuck in inventory. Calculate the minimum
and the maximum stock that is required for your business and ensure that your
inventory does not exceed the maximum stock at any point. Don’t get tempted to
order and stock more items just because the vendor is offering you special discount
or payment terms for bulk orders. If you
stock items more than what is required for your normal consumption, you are
funding your vendor. Ageing of inventory
is also very important. Business owners
must monitor their inventory regularly to identify those items which have not
moved for a reasonable period of time, and disposed them off at a discount
before they become obsolete and useless.

There
are several other factors which also need to be monitored on a regular basis
for survival. However, any businessperson
who monitors SRI (the three factors, Sales, Receivables, and Inventory mentioned
above) regularly and takes corrective action immediately, is in a much better position
to survive and succeed in this complex and dynamic world.

About the Author

Govindraj
is a CPA, CIA, CISA and has more than 25 years of finance, accounting, auditing,
and IT experience. He has worked as a controller and a CFO of many
multi-million dollar companies. He is a Gold Winner under the
category "Executive of the Year - Computer Software" at International
Business Awards 2016 held at Rome, Italy, and a Bronze Winner under
the category "Executive of the Year - Cloud Computing / SaaS /
Internet" at Golden Bridge Awards 2016 held at San
Francisco. He has lot of experience in designing systems /
processes, and implementing ERP packages in various industries. He is the
CEO of Cashpundit Inc. (www.cashpundit.com), a startup that he
founded to help businesses to manage their collections and cash flows.

Monday, October 9, 2017

One of our major customers, a consumer electronics
distributor who had huge receivables from a well-known retailer, told me “IF I STOP SUPPLIES, THEY WILL STOP PAYMENT, AND START BUYING FROM MY COMPETITOR”. It was a catch 22 situation. The retailer in question was a reputed company
which had many branches across the country.
The distributor had offered 30 days credit to the retailer. Within 15
days after the first order, the retailer had placed another big order. After 30
days when it was time to pay the overdue invoices relating to the first order, the
retailer placed one more order and requested for additional time to pay the
overdue invoices. The distributor was
comfortable in extending additional credit since he was getting sizeable orders,
and he did not anticipate any issues with the payment from the retailer. As weeks and months passed by, the supplies to
retailer increased at a much faster pace than the increase in the payment from
retailer. Whenever the distributor used
to ask the retailer to clear the overdue invoices to get new supplies, the
retailer used to clear small part of the overdue invoices and request for additional
supplies. The retailer had excellent business
but was poor in paying his suppliers. The retailer used to tell the distributor
not to force him to go to other distributors by stopping the supplies. It was a
“SOFT EXTORTION”. In about a year, before
the distributor could realize, HIS HUGE
RECEIVABLES FROM THE RETAILER HAD BECOME HIS LIABILITY.

I am sure many of you, who had offered credit without due
diligence and proper documentation, must have faced a similar situation. Here
are the 5 ways by which you can avoid your receivables from becoming your
liability.

Proper Credit
Documentation

Never ever offer credit to any customer without proper due
diligence, and before signing and completing the credit related
documentation. Many a times, small businesses,
in their eagerness to get associated with big brands and customers, tend to
either overlook or ignore this very important step before offering credit.

Get Post Dated Cheques

Wherever possible, negotiate with the customers and offer
them credit against Post Dated Cheque (PDCs).
For example, if you are offering 30 days credit, get a cheque which is
dated 30 days from the date of invoice at the time of delivery of goods. In many countries, bouncing a cheque is a
criminal offence and hence businesses may be reluctant to issue PDCs unless
they are sure of honoring it. If
customers are reluctant to issue PDCs for supplies within the credit limit,
then insist on a PDC for supplies over and above the credit limit.

Get a Revolving LC
or a Bank Guarantee

Ask the customer to open a Revolving Letter of Credit (LC) or
give a bank guarantee against credit supplier. Most of the big businesses will
have bank facilities and they should be able to provide you one of these. You
can negotiate and share the bank charges with the customer.

If a customer is not willing to provide a PDC or LC or guarantee,
then be careful with such customer. If people have intention to pay on time,
they should not hesitate to provide PDCs, LCs or bank guarantees.

Take credit
insurance

Another good way of protecting your company against failure
of your customers to pay your debts is to take credit insurance against your
major customers. Even though credit insurance comes at a small cost, it will
help you to increase your sales by offering credit to the credit insured
customers, since you are assured of payment by the credit insurer in case the customer
defaults. Look for a credit insurer who has
coverage across cities and countries wherever you have customers. It is extremely important to evaluate and
negotiate the terms and conditions of various credit insurance companies before
finalizing one of them. In one of my earlier companies, I used to deal with
“Euler Hermes”, which is the world’s number 1 credit insurance company that has
coverage across major cities in the world.

Don’t be afraid to say NO to a credit sale if
you are not comfortable

It is
very important to know when to say NO to a credit sale. Even though Sale is the life blood of business, if the customer is not regular in
payment, if his receivables has crossed the credit limit, or if there are
several unpaid overdue invoices, do not offer additional credit to the customer
without securing the existing receivables. Credit department should have a
mechanism to get the credit rating / standing of all their customers from the market,
and reevaluate on a regular basis whether to continue to offer credit to
customers.

About the Author

Govindraj
is a CPA, CIA, CISA and has more than 25 years of finance, accounting, auditing,
and IT experience. He has worked as a controller and a CFO of many
multi-million dollar companies. He is a Gold Winner under the
category "Executive of the Year - Computer Software" at International
Business Awards 2016 held at Rome, Italy, and a Bronze Winner under
the category "Executive of the Year - Cloud Computing / SaaS /
Internet" at Golden Bridge Awards 2016 held at San
Francisco. He has lot of experience in designing systems /
processes, and implementing ERP packages in various industries. He is the
CEO of Cashpundit Inc. (www.cashpundit.com), a startup that he
founded to help businesses to manage their collections and cash flows.

Monday, October 2, 2017

Have you ever heard a school or college kid saying “I want
to be a Credit Controller”? I am sure
you have not. However, you must have
heard kids saying they want to become a Doctor, Engineer, Pilot, Teacher,
Journalist, Astronaut, Accountant, Lawyer, Banker etc., but not a Credit Controller.
Even though kids do not aim to be Credit Controllers, it is surprising to note that there are hundreds
and thousands of Credit Controllers across the world who are adding lot of
value to their organizations.

Most of the newly-hired credit controllers undergo
on-the-job training to transition to their duties smoothly. Credit Controllers are primarily responsible
for collecting the debts and improving the cash flow of the company. Credit Controllers’ role starts after a sales
person brings a customer’s Purchase Order and ends after they collect the money from the
customer. It is said that “A Sale is a Gift until You Collect the Money”. In a way, Credit Controllers ensure
that the sale does not become a gift by collecting the money from the customers. Credit Controllers also work for debt collection agencies where they are responsible to meet set cash and debtor targets on a daily basis.

Though Credit Controllers contribute a lot to the company, they do not get the kind of recognition that sales, marketing, finance,
and other departments get. On several occasions, people within and outside the
organization dislike Credit Controllers for doing their job sincerely.

Credit Controllers
and Sales Persons

Credit Controllers regularly liaise with sales department to
resolve credit issues smoothly. However, sometimes there are situations when
they decide not to offer credit to a customer. In such situations, the sales
department thinks that Credit Controllers are creating road blocks because of
which they are unable to achieve their sales targets and earn their sales
commission.

Credit Controllers
and CFO / FM

Many a times the CFOs / FMs feel that Credit Controllers are not doing enough to collect the overdue invoices, even though the
delay in payment of invoices by customers may be because of issues like
incorrect invoicing, proof of delivery, credit notes, or any other dispute which
is not related to credit department. Credit Controllers are always under
pressure from CFOs/FMs to collect their debts faster and reduce the DSO (Days
Sales Outstanding).

Credit Controllers
and CEO / Owner

Sometimes the CEO / Owner overrules the credit advice of Credit Controllers and offers credit to non-credit worthy customers because of business considerations. In such cases, it is little frustrating for Credit Controllers to follow-up and collect the debts of customers to whom they had decided
not to offer credit in the first place.

Credit Controllers
and Customers

Credit Controllers are supposed to be regularly in touch
with customers and resolve all issues related to invoices and ensure that the
money owed to their company is collected.
But sometimes there are situations when he/she has to put the customers’
account on credit hold if the customers default payment or customer’s credit situation
changes. In such situations the
customers dislike the credit controllers even though they are doing their job
as per company’s policy.

Conclusion

Credit Controllers are the Unsung Heroes of the company.
They always put company’s interest above everything else, even at the cost of
becoming bad people in front of others. Day
in and Day out, they think of collecting the debts of the company and doing
whatever they can to ensure that the debt does not go bad. They are as much
concerned about the liquidity of the company as CFO, FM, CEO and Owner are. All
their decisions, like denying credit to a customer, giving credit advice to the
CEO / Owner, chasing a customer for payment, are all in the best interest of the
company.

I feel that, all the people within the company especially the Sales persons, CFO, FM, CEO, and owner should appreciate Credit Controller’s role and respect their decisions. After all, they are also working
in the best interest of the company, and doing their best to protect the company
from going bust by collecting the debts of the company.

About Govindraj Muthyalu:

Govindraj
is a CPA, CIA, CISA and has more than 25 years of finance, accounting, auditing, and IT experience.
He has worked as a controller and a CFO of many multi-million dollar
companies. He is a Gold Winner under the category "Executive
of the Year - Computer Software" at International Business Awards 2016
held at Rome, Italy, and a Bronze Winner under the category "Executive
of the Year - Cloud Computing / SaaS / Internet" at Golden Bridge Awards
2016 held at San Francisco. He has lot of experience in designing
systems / processes, and implementing ERP packages in various industries.
He is the CEO of Cashpundit Inc., a startup that he founded
to help businesses manage their collections and cash flows.

Sunday, September 24, 2017

Customers are the lifeblood of your business. They are what allow you to in turn pay your bills, so timeliness of payments is not only important but also crucial for survival of your business. That being said it’s important for you to be aware of the standing of your customers so you can be sure to be paid on time, and the sooner you are aware of the issues the better it is for your business. For example if you know a customer is having some cash flow issues it could sometimes be beneficial to give them some breathing room for paying an invoice, this might be counter intuitive but can also go a long way in gaining good will. At any rate it’s important to know if your customers are having cash flow issues, but what you do with that information is up to you. Here are seven signals that may indicate a small business is having cash flow issues.

1. Late Payments

This is one of the biggest indicators that a business is having cash flow issues. As soon as payments start to come in late it may be that because they are holding those payments waiting for cash to come in to cover what they owe. If late payments continue, be sure to communicate with your customer as communication with most business issues is often the key to a good outcome.

2. Partial Payments

If you receive partial payment against an invoice, this is also a big indicator that your customer has cash flow problems. Sometimes a business when they are worried about meeting all their obligations will send only a partial payment instead of the entire payment due. This might be all they have at the moment. When this occurs it should be followed up immediately.

3. Poor Communication or Late Communication

If it’s difficult to get a hold of your customer or communicate with them, whether its email or the phone, it could be a sign that they are having issues with cash flow. If you are constantly chasing down your customer either to get them to pay or simply to talk to them they might be having issues paying their bills and therefore having cash flow issues. Many people have a tendency to avoid taking calls of vendors and not responding to their mails if they are not in a position to pay.

4. Bounced or Returned Cheque

This is another huge sign. If a cheque is returned from the bank it must be acted on immediately and you need to have your customer cover all bank costs. It’s possible that simply it was a bookkeeping mistake but you shouldn’t presume so and should move quickly to collect on that account. A bounced cheque is bad for everyone involved.

5. Post Dated Cheque

If businesses are regularly issuing post dated cheques on the due date of invoices, this certainly is a sign that they are having cash flow issues. While post dating is essentially paying an invoice late, some businesses feel that if they give the cheque to you by the invoice date then they have paid on time, even if the cheque can’t be cashed until a later date. This of course is absolutely untrue, the day the cheque can be cashed is the day the invoice is officially paid. A post dated cheque is worthless until the date of issue unless you have cheque discounting facility with banks.

6. Requests to Postpone Cheque Deposit

If businesses regularly request you to postpone depositing your cheques, it is a clear sign that they have cash flow issues. Depending on your relationship with the businesses, it may sometimes be OK to accept their requests, but you must keep an eye on how punctual they pay their future invoices.

7. Requests for Statement of Accounts / Invoices

If businesses request you to send statement of accounts and / or invoices whenever you follow-up for payment, it may be a sign of a cash flow issue. Many customers resort to this tactic to delay paying their invoices whenever they have cash flow issues. If customers request you for statement of accounts and / or copies of invoices, send them those documents, call them immediately, confirm that they have received the documents, and ask them for payment.

Conclusion

Just because you see one of these from a client isn’t a guarantee that they are having cash flow issues but it certainly is a sign and should be taken seriously. These red flags are good opportunities to follow up with the business and see if you can find out what the real issue is and if there is anything you can do to assure that you get paid on time and you keep your customer, hopefully for years to come.

About Govindraj Muthyalu:

Govindraj is a CPA and has more than 25 years of finance,
accounting, and IT experience. He has worked as a controller and a CFO of many multi-million dollar companies. He is a Gold Winner under the category "Executive of the Year - Computer Software" at International Business Awards 2016 held at Rome, Italy, and a Bronze Winner under the category "Executive of the Year - Cloud Computing / SaaS / Internet" at Golden Bridge Awards 2016 held at San Francisco. He has
lot of experience in designing systems / processes, and implementing ERP
packages in various industries. He is
the CEO of Cashpundit Inc., a startup that he founded to help businesses manage
their collections and cash flows.

Thursday, August 31, 2017

In
this issue, we are extremely happy to feature the exclusive interview of Mr. Sharan Patil,
who is our CashPundit for this issue.

Mr Sharan Patil
is the Managing Director of Inspire India Financial Solutions Pvt. Ltd. Sharan is an accomplished executive and an
identified expert in Financial Investments Planning (TFIP) and Portfolio
Manager. He is known for his deep understanding of the distribution practices
and its challenges. Also an experienced trainer, he has trained more than
10,000 people till date in major Indian cities and towns. He frequently
conducts transformational training programs with well known corporate and
Govt. organizations. His trainings are focused on effective financial planning
via variety of investment instruments such as stocks, mutual fund,
commodity, forex, insurance & real estate and taxation gains. He
started his career as a Financial Analyst with IEC (International Commodity
Exchange) where he has managed big commodity portfolios. With his rich experience
in the financial industry, he started Inspire India Financial Solutions Pvt Ltd
with the aim of providing one-stop investment advice for investing in
equity, mutual funds, systematic investment planning (SIP) and Total
Financial Management to his clients. Sharan believes in positivity towards life
and pledges by the idea of visualizing his goals in order to see them materialize.
He is driven by passion to empower people to become financially
independent. He and his highly qualified team takes keen interest in providing
its customers with personalized investing advice into well balanced portfolio.

"Dream Big, Execute Smart, Be Honest" has been his success mantra. Sharan is an aeronautical engineer by qualification. He hails from Gulbarga
where he completed his pre-university school. He later enhanced his education
with a MBA in Finance in the year 2009.

CashPundit Inc:It is a great pleasure to interact
with you and publish your thoughts in this interview.

Mr. Sharan Patil:

Thank you. I’m equally thrilled to share my experiences here.

CashPundit Inc.: Inspire
India has been growing very fast and winning several industry awards, year
after year. What is the secret of your
success?

Mr.
Sharan Patil:

For me success isn’t a destination but the journey itself. That’s what
makes it so exciting. This present model of ours took shape and has evolved
over the past 15 years.

It all began as a personal life transforming program. But the financial
decisions and financial management are the key areas that could reflect on the
quality of anybody’s life. Eventually we realized that money is inevitable and
most people’s worries revolved around money and they weren’t sure whom to
approach in order to find solace to such issues. That’s when we decided to bring
in financial awareness programs. We conducted educational programs on personal
financial management. These were followed by wealth checks or financial
planning for individuals and then goal based investments. We received a lot of
appreciation for this and that’s when we understood the missing link and
continued our efforts in that direction. We got better with each program. Today
it’s one of the major contributors to our ever increasing clientele which stands
at more than 7000!

Through this model we could fill the gap and provide the one-stop
platform for people to plan and invest. The major reason why we are so
successful is we took the client-first approach instead of being
product-centric. We were sure that if we made our clients create wealth we would
always be winners. That’s the story behind all the awards that we’ve been
recognized with for all these years. End of the day it the satisfaction of
showing the right direction to people to achieve a financially healthy life
that motivates us to reach out for more.

CashPundit Inc.:You seem to have coined
the phrase “Honestly, Wealth is Health”. Why do you say that? And, what do you
mean by “Financial Freedom”.

Mr. Sharan Patil:

In India its very common to hear
phrases like “Money isn’t everything”, “Money is not all that important”,
“Money can’t buy happiness”, etc, mostly statements made by the middle class
which struggles the most to make the ends meet. For such people big money is
either created illegally or by sacrificing one’s happiness which are mere
assumptions.

“Money isn’t everything but its next to
oxygen”, this was quoted by none other than Warren Buffet himself. It’s very
obvious in these days that you require both time and money to maintain a
healthy lifestyle. It could be going to gym or a health club or a rejuvenating
retreat. You’ll find time to do these only if you have the money. So financial
well-being is very important for a healthy life!

We got our political freedom in 1947 but how many of us are truly
financially free? As Joel Greenblatt puts it “One of the great benefits of
having money is the ability to pursue those great accomplishments that require
the gifts of being and of time”. Financial Freedom to me is having time and
money to accomplish our goals and dreams. How many people truly enjoy their
work and are doing what they’re passionate about? Most of them are forced to
work and take up jobs that support their financial needs. How would it be to
not worry about the finances and do what you actually love to do, at-least at
some point of your life? It’s not retirement. It rather gives you the freedom
to do what you enjoy doing without worrying about the expenses. We help people
understand this and plan accordingly. That’s what financial freedom is all
about.

CashPundit Inc.:We understand that you have few customers who are Bankers, MBAs
and Accountants. These people are supposed to have sufficient knowledge to
weigh the risks and merits of an investment opportunity.Why do they come to you
and what kind of advice do you give them?

Mr. Sharan Patil:

These professionals do exceptionally
well in their area. But when it comes to investing they can only think in
traditional ways. For example a banker, most often than not, would only know
about how to give loans or how to collect deposits or at the most sell a couple
of products that they’re told to. Unfortunately none of them foray into the
goal based investments. Why this makes a difference is it lets the investor
understand why he’s doing whatever he’s doing. This is very important to make
the investor to stick-on especially when it comes staying invested for a long
term. Most of the professionals like MBAs and accountants read about security
markets in their academics but no hands on experience. So in a way they lack
the right kind of knowledge and experience required when it comes to investing.
Since they come with a preset financial background, instead of limiting
themselves to their areas, it’ll be great if they upgrade their knowledge in
goal based investments, financial planning, risk-to-reward ratios, equity
investments for long term, inflation adjusted investments, etc.

CashPundit Inc.:Who should invest and at what age they should start investing?

Mr.
Sharan Patil:

It is like asking the right time to plant a tree. The right time
is now!! The moment you realise the importance of investment, you should start.

Anybody and everybody with financial needs, goals and desires can
start investing. Ideally, we recommend people to start their investments at an
early age. It need not be a big amount. Even a small amount like Rs 1000 a
month invested over a long period can see immense growth due to power of compounding. This is considered
as the eighth wonder of the world – one who understands this earns one who
doesn’t, pays for it.

Long term investments in asset classes like equity, real estate
and gold are very good options to maximise benefits. Also, starting early will
prepare you well for the major upcoming goals like children’s education, buying
house, holidaying and finally the retirement. Starting early means the time gap
works in your favour while late starters have to put in more money to see
similar results.

CashPundit Inc.:Is there anything else you would like to share with our readers?

Mr.
Sharan Patil:

Yes, one of them is everybody
must be an investor. As per Warren Buffet, you need not be wealthy to be an
investor but you certainly must be an investor to be wealthy. Simple, yet so
profound! I’ve seen people starting with a small amount and create huge wealth.
It is possible with disciplined investment. It is important to understand your
basic needs and first address them. Equally important is to have financial
goals and dreams. They provide you the necessary fuel to stay motivated and
keep investing.

Secondly, it’s a must to
have a personal financial advisor, a good one though! It is like Kurukshetra
war. Pandavas had Krishna as their advisor who steered them to victory. Like
Krishna, a good advisor can help investor create wealth. A good advisor, even
though pricey, is one who understands your actual needs, goals and dreams and
is interested in making you rich. It’s a great practice to spend time with your
advisor and review your investments, goals. It is never a onetime activity.
Every 6 months is an ideal frequency. Also, as all things come with a price, so
is it with financial advice. End of the day it’s the advisor on whom you can
rely and rest assured that your portfolio would be handled with care. So avoid
negotiating for a quality service and reap rich benefits.

At Inspire India we
relentlessly strive to make sure the clients’ portfolios are wisely selected
and periodically reviewed. That’s the way we’ve become the most trusted, reliable
and approachable advisory in the industry. We follow some of the best practices
prevalent to the current scenario. The numerous awards and recognitions we’ve
won in all these years and the good-will we’ve created with the clients stand
testimony to this.

CashPundit
Inc.: You are an Aeronautical
Engineer by qualification. Can you
please tell us about your journey from Aeronautical Engineer to Financial
Investment Expert and the MD of Inspire India Financial Services?

Mr.
Sharan Patil:

The shift was certainly not a
conscious decision. It was purely by chance. Aviation industry was going thru
tough times back then with not many openings. That’s when I happened to read
the all famous book “Rich Dad Poor Dad” which inspired me into personal
finances. Coming from a middle-class family I could relate to what the book
said and how it is just the mindset that makes the difference. Neither my
background nor my education was tuned to create wealth. So I slowly started
making changes in all possible ways, like my knowledge, communication skills,
self esteem and confidence. I also attended a workshop which helped me realize
my true potential. Meanwhile a friend introduced me to commodity trading, after
which there was no looking back. I took up qualifications to support me in this
direction. A host of related seminars, workshops and conferences came handy in
understanding the nuances of the industry. Meeting some of the well know fund
managers like Nilesh Shah, Madhusudan Kela broadened my perspective. I treat
them as my mentors. Reading about Warren Buffet, Robert Kiyosaki was one of my
favorite pastimes. I’m very passionate about conducting workshops to educate
people on financial matters. And the most overwhelming moments are when I see
profits in my clients’ portfolios.

“Financial Freedom Is My
Birthright” is my new tagline…

CashPundit Inc.:Thank you so much for your valuable inputs and time spared for CashPundit
Inc. I am sure our readers will thoroughly enjoy it. Wish you all the best for
all your future endeavors.

Wednesday, August 16, 2017

In our first issue, we are extremely happy to feature the exclusive interview ofMr. Surendra Jain, who is our CashPundit for this issue.

Mr.Surendra Jain is a fellow member of The Institute of Chartered Accountants of India and Post Graduate in Management. He has over 35 years of post-qualification experience in Industry in India, Saudi Arabia and UAE. Since past 20 years he is associated with a UAE Local Conglomerate – A A Al Moosa Enterprises, The ARENCO Group, Dubai and presently working as Group Finance Director. He is a member of the Executive Committee of the Group. In addition, he is on the Board of various entities of the Group.

Mr.Jain is Past Chairman of Dubai Chapter of The Institute of Chartered Accountants of India which has over 2000 members. He has been the President of ICAT (Institute of Chartered Accountants Toastmasters) Club, a forum involved for the development of soft skills (Communication and Leadership skills) of Indian Chartered Accountants.

CashPundit Inc:It is a great pleasure to interact with you and publish your thoughts in this interview.

Mr. Surendra Jain: Thank you.

CashPundit Inc: A.A. Al Moosa group is one of the oldest and the reputed groups in UAE. Can you please brief our readers about the various industries A. A. Al Moosa Group is into?

Mr. Surendra Jain:

The flagship entity of A A Al Moosa (ARENCO Group) is Arenco Real Estate – leasing of office space, residential villas & apartments, warehouses and staff accommodations and hotel apartments. The Group has seven international chain of hotels which are managed by Hilton, Four Points by Sheraton and Ramada. Three upcoming hotels on Palm Jumeirah will be managed by Hilton, Marriott and Taj respectively. Arenco has oldest and largest Architect practice in UAE. In addition, ARENCO has fleet of over 25,000 vehicles which are leased under the brand name of Thirfty and Dollar. The Group has manufacturing entity – Dubai Furniture Manufacturing Co. LLC which produces King Koil and Serta Spring mattresses in UAE, India and Saudi Arabia. The Group has Furniture trading business – Marlin Furniture. In addition, the Group has high end Italian furniture trading business – Western Furniture (Nattuzi). The Group has joinery and laundry as well which mainly caters in house business.

Organizing adequate bank facilities at the best possible terms & conditions without excessive leveraging for various development of properties. In addition regular monitoring of cash flow to ensure that bank commitments are met without fail. This resulted in to having positive reputation with financial institutions. We remain in driver’s seat. No sooner we conceive a project, we decide which financial institution we should opt for who fulfils our wish list.

CashPundit Inc:Your group probably is the number 1 real estate company in UAE. What is your USP and how do you manage to be number one?

Mr. Surendra Jain:

Arenco Real Estate is primarily in leasing business and not in freehold business. We therefore do not get affected with ups & down in the market. We provide a full range of real estate leasing to new entrants in Dubai – from office space to ware houses to staff accommodation to residential apartments and villas. In addition, we provide complete satisfaction to the tenants which includes all required amenities, 24 hours free maintenance and security to our properties.

Our ARENCO Architects provides full range of service – from design of a property to supervise construction and handover of the property. Allied businesses such as joinery, laundry furniture trading and manufacturing and car rental also add value to overall savings on cash outflow from the Group.

More importantly, key personnel have been with the Group for over 20 – 30 years. Complete independence and reliance from the Owners to these key personnel is the key to success for the Group.

CashPundit Inc: You were Chairman of the Dubai Chapter of The Institute of Chartered Accountants of India. Can you please share with our readers some of the initiatives undertaken by the Institute to promote the CA profession in the region?

Mr. Surendra Jain:

A student can undertake article ship in UAE under a practicing Chartered Accountant. Student can undergo Industrial training in the third year of article ship in UAE. Moreover a student can write exams from Dubai. Indian Chartered Accountants are well respected in Middle East in general and UAE in particular. Many local conglomerates, Real Estate giants such as Emaar, Nakheel and financial institutions are managed by Indian Chartered Accountants. We made an attempt to improve the visibility of Indian CA profession in UAE through various seminars and conferences.

CashPundit Inc: In your opinion, how critical is cash flow management for the survival of business? And what is your advice to the fellow finance professionals on how to manage it?

Mr. Surendra Jain:

Absolutely. Cash is king and managing cash flow successfully is key for every organization. Now technology is at our footsteps and we should take advantage of available software to closely monitor and forecast our cash & bank position to meet all the commitments on time.

CashPundit Inc:We would like to understand your point of view on how VAT may impact Cash Flow of UAE companies post implementation of VAT?

Mr. Surendra Jain: VAT will definitely impact the cost and cash flow of various entities in UAE. For example, hotels and hotel apartments, VAT will be on the top of Municipality fee and service charges. Hospitality Industry being very competitive, I doubt it could be passed on to the end user.

Since fuel prices have been low for few years it is imperative for the Govt. to find alternate sources of raising funds for continuous infrastructure development in the Country.

VAT can be very simple to monitor and comply with if all the systems are in right place but it can be equally highly complex, costly, and time consuming if systems and people are not fully prepared. Monitoring cash flow closely is the need of hour and UAE business houses should prepare well in advance to meet the challenges.

CashPundit Inc:Thank you so much for your valuable inputs and time spared for CashPundit Inc. I am sure our readers will thoroughly enjoy it. Wish you all the best for all your future endeavours.

Mr. Surendra Jain:

Thank you and wish you good luck for providing better financial discipline.